Date of publication: Apr 06, 2022 • 12 hours ago • 2 minutes reading • 17 reviews This Drummond 1611 avenue in Vancouver’s Point Gray neighborhood is available for $ 21 million and will not be available to most foreign buyers under the new federal law expected to be announced on Thursday. Photo by David Carrigg / Submitted / jpg
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The federal government ban on most foreigners from buying homes for two years, expected in Thursday’s budget, is a “sign of virtue” and is unlikely to affect Vancouver subway prices, local experts say.
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However, with rising interest rates already reducing the real estate market for housing, it could end up looking like a victory for the federal liberal government. “It’s a sign of policy virtue instead of action that will have a significant impact on affordability,” said Tsur Somerville, director of the UBC Center for Urban Economics and Real Estate. “It has nothing to do with what will happen to the most expensive properties in Point Gray, because it is not what determines the affordable price.” Somerville said BC already has a 20 per cent tax on foreign buyers and a speculation and vacancy tax that has curtailed demand from abroad – while prices in some suburbs have risen by 50 per cent in the past two years. He said the ban was also not expected to apply to foreign students, permanent residents, foreign workers or foreigners buying their main residence in Canada. It will also not apply to recreational areas.
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“The rich will find a way to get rich. If I really want to be able to buy a property somewhere I do not want to live, I’m sure I can find a student buyer for it. “There will always be gaps,” Somerville said. Local broker and analyst Steve Saretsky called the policy a “political applause” that is likely to work as the real estate market has already slowed in the past month as fixed mortgage rates for five years have risen from 1.5 per cent to 4 per cent. percent. “I will not be surprised if this ban comes and the market starts to fall and the common perception will be that the policy worked,” Saretsky said. “This will look like a ‘W’ for the Liberal government, but the market is already slowing down. “The timing of the policy will be great for political gain, but mortgage rates will do all the politics work for them.”
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According to Bloomberg, a person familiar with the matter, who asked not to be named because the matter is private, said that the budget of the Minister of Finance Chrystia Freeland on Thursday will also contain several billion dollars for the construction of affordable housing and to help local governments update their systems to enable faster construction of new properties. Freeland will also introduce legislation that allows Canadians under the age of 40 to save up to $ 40,000 on a down payment for a new vehicle that is tax-exempt, the man said. Prime Minister Trinto is also expected to implement the proposed ban on “blind bidding” on homes – a system in which bids are kept secret when someone sells a home. Blind bidding has been blamed for speeding up price gains, with real estate sometimes selling for hundreds of thousands of dollars above the asking price. Some believe that secret offers make every potential buyer offer as much as they can. [email protected] More news, fewer ads, faster load time: Get unlimited, ad-lite access to The Vancouver Sun, The Province, the National Post and 13 other Canadian news sites for just $ 14 / month or $ 140 / year. Register now through The Vancouver Sun or The Province.
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